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National Fire Insurance Co. v. Sippel Development Co.

June 15, 2006

NATIONAL FIRE INSURANCE COMPANY, PLAINTIFF,
v.
SIPPEL DEVELOPMENT CO., INC., DEFENDANT.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

Memorandum Opinion

Plaintiff, National Fire Insurance Company (National), filed a complaint seeking an order vacating an arbitration award under the Federal Arbitration Act (FAA). 9 U.S.C. § 10. Currently pending before this Court are the parties cross-motions for summary judgment (doc. nos. 13 and 14) on the issue of whether the arbitration awarded should be vacated. Plaintiff disputes that portion of the award that includes penalties, interest, attorney's fees, and post-award interest. For the reasons that follow, this Court will confirm the arbitrator's award in all respects, grant defendant's motion for summary judgment, and deny plaintiff's motion for summary judgment.

I. Background

On May 3, 2005, Sippel filed a breach of contract action against National and Westra Construction (Westra) before this Court (see related case, civil action no. 05-cv-574), alleging that defendant Westra, who had a subcontract with Sippel and who was the general contractor for the construction of a Wal-Mart store in Harbor Creek, Pennsylvania, along with National, who issued a subcontract payment bond as surety for Westra, failed to remit payment of $214,421.94 that was allegedly due Sippel under the payment bond.

On June 10, 2006, the parties filed a Joint Motion to Stay pending arbitration, and following a case management conference, this Court closed this case based upon the parties agreement (pursuant to an arbitration clause) to final binding arbitration. The parties then submitted their dispute to arbitration pursuant to the American Arbitration Act, and on March 9, 2006, a single arbitrator entered an award in favor of Sippel and against National for a total of $329,943.02 ($52,684.50 of which represented attorney's fees, $31,034.76 of which represented interest, $31.034.76 of which represented penalties damage, and $767.00 of which represented costs).

National then filed the instant complaint seeking an order vacating that portion of the arbitrator's award that covers attorney's fees, interests, penalties damages, and costs.

II. Standard of Review

Summary judgment under Fed.R.Civ.P. 56(c) is appropriate "'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Woodside v. School Dist. of Philadelphia Bd. of Educ., 248 F.3d 129, 130 (3d Cir. 2001), quoting Foehl v. United States, 238 F.3d 474, 477 (3d Cir.2001) (citations omitted). In deciding a summary judgment motion, the court must "view the evidence ... through the prism of the substantive evidentiary burden" to determine "whether a jury could reasonably find either that the plaintiff proved his case by the quality and quantity of the evidence required by the governing law or that he did not." Anderson v. Consolidated Rail Corp., 297 F.3d 242, 247 (3d Cir. 2002), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986).

III. Discussion

The FAA authorizes a district court to vacate an arbitration award under the following limited circumstances:

(1) Where the award was procured by corruption, fraud, or undue means.

(2) Where there was evident partiality or corruptions in the arbitrators, or either of them.

(3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.

(4) Where the arbitrators exceeded their power, or so imperfectly executed them that a mutual, final, and definite award upon the ...


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